FLORENCE, Italy (Reuters) - An Italian court on Thursday acquitted three former managers of Monte dei Paschi di Siena of charges that they obstructed regulators and misled authorities over a 2009 derivatives trade that prosecutors said was used to conceal losses.

The appeals court in Florence, near the home town of Italy’s fourth-biggest bank, scrapped jail sentences handed down by a lower court for former chairman Giuseppe Mussari, ex-chief executive Antonio Vigni and one-time finance boss Gianluca Baldassari.

The appeals court said the accused were acquitted because no crime had been committed.

The previous court ruling had called for jail terms of three years and six months for each of the men for allegedly hiding a document relating to the transaction with Japanese bank Nomura.

The three executives are still on trial in Milan in relation to that derivatives trade and other transactions for alleged market rigging, false accounting and obstruction of regulators. The three men have always denied any wrongdoing.

In the Florence case, defense lawyers said regulators had access to all the necessary information to understand the scope of the derivatives operation.

Prosecutors had argued that the executives had not disclosed to the Bank of Italy a key document which was later found in a safe by Vigni’s successor, Fabrizio Viola.

Prosecutors have said that the document, a contract known as mandate agreement, was essential for supervisors to be able to understand the nature of the transaction.

But the defense said another document, which the Bank of Italy did possess, contained all the necessary information.

“The key element was the discovery of the deed of amendment which has the same contents as the mandate agreement,” Baldassarri’s lawyer Filippo Dinacci said last month, while the case was ongoing. “Bank of Italy inspectors had it and the appeals court acquired it.”

Baldassarri, speaking after the verdict on Thursday, said: “We did not obstruct regulators, it’s as if somebody had put an elephant in the living room and tried to convince guests it was a sofa.”

Thursday’s verdict could lead to more criticism of the Bank of Italy, which has already come under fire together with market watchdog Consob in the wake of a string of bank failures over the past few years.

“This trial shows that with a more careful analysis, supervisors would have spotted the connections,” said Alessio Villarosa, a member of the populist 5-Star Movement who sits on the parliamentary committee that is investigating recent banking crises.